A stack being led by a Commander can fight in a directed manner, and can also abstain from fighting. An unled stack in contact with non-allied forces will auto-attack.Erf-b1-p040a
The term Commander is used in two separate ways. The actual rank of Commander indicates that a unit has the ability to lead a stack in combat, and that they are subordinate to a side's Overlord. All such units, including Casters, Warlords, and Chief Warlords, are periodically called Commander by their associates and superiors as a title.
Lack of Clarity in Terminology
Parson states early on that "any unit with leadership ability is called a Commander or Warlord" and "these units give a bonus to units under their command"Erf-b1-p040a. (This is true; every unit with Leadership is a Warlord, and therefore, a Commander.)
This is then amended/updated with the additional knowledge that Casters are Commanders tooErf-b1-p084a, but with no Leadership ability. (True as well - Casters are Commanders that don't have Leadership - otherwise they'd be Warlords too.)
So, it seems that "Commander" is a more general term - Commanders have an ability to lead other units in combat, while Warlords are Commanders who have the Leadership natural ability and thus give units under their command a Leadership bonus. It should be noted that in some special cases Casters can give a bonus to certain units under their command, though this has nothing to do with Leadership (known examples are Golems led by a Dirtamancer and uncroaked led by a Croakamancer)Erf-b1-p084a.
Duty is one of the three effects of Natural Thinkamancy (besides Obedience and Loyalty) that a Ruler exerts on all his subjects. Duty affects Commanders only. Has greater effect on Warlords, and greatest on Chief Warlords. (And therefore the least effect on Casters.) Duty requires Commanders to use their own initiative in the service of the Ruler. Another effect of Duty is that Commanders cannot withhold information and cannot conspire against the Ruler.Erf-b1-p084a
Use as a Title
Word "Commander" is used as a title to address Warlords and, occasionally, Casters. In this sense words "Warlord" and "Commander" seem to be used interchangeably, although Commander seems to express more respect.
Stanley addresses Wanda as CommanderErf-b1-p017, Wanda addresses Parson as Commander Erf-b1-p019, Jillian addresses Webinar as CommanderErf-b1-p050, Webinar addresses Jillian as WarlordErf-b1-p050, Ansom addresses Jillian almost exclusively as CommanderErf-b1-p056Erf-b1-p056Erf-b1-p073Erf-b1-p080, Jaclyn addresses Jillian as Commander Erf-b1-p066, another archon addresses Jillian as WarlordErf-b1-p069.